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Six years after the San Benito County Supervisors voted to allow the cultivation and sale of cannabis, there are no legal cannabis growers in the county and therefore no tax revenues.
To fix this, the supervisors will put a measure on the 2026 ballot to reduce taxes on cannabis in an effort to attract more growers.
The plan was developed by county staff and Supervisors Kollin Kosmicki and Bea Gonzales, and discussed at a board meeting on Nov. 26. Dulce Alonso, the county’s principal administrative analyst, addressed the lack of cannabis businesses in San Benito County.
“Many businesses that are interested in establishing here claim that our high taxes are a barrier for them,” Alonso said.
To bring more cannabis growers to the county, the board plans to exempt cannabis cultivators from paying any taxes at all until Dec. 31, 2026, and put a measure on the ballot, to be voted on in June 2026, seeking voter support to reduce the current tax rates. Details of the exemption are still not finalized and will be presented to the board in a future public hearing.
“We listened to the local growers, and the way we had the parameters set with the county, it was almost making it cost-prohibitive for them,” said supervisor Gonzales. “We recommend that we bring down some of the fees so that they’re in line and comparable to other regions in the area.”
San Benito County is not alone in looking to reduce cannabis tax rates. Many communities around California are doing the same. Two years ago, Humboldt County, with the most growers in California, suspended its cultivation taxes to relieve hundreds of struggling farmers. And in April, Sonoma County reduced cannabis taxes on cultivators and manufacturers.
“For San Benito to want to lower taxes is a common trend that we’re seeing across California counties,” said Gretchen Giles, a public relations professional specializing in the cannabis industry, “because counties initially thought that they had a golden goose and that they were just going to make money no matter what. It’s not out of line for San Benito to make this change and to try to make it easier for their growers to survive.”
The plan to reduce the county’s cannabis tax rates came from an analysis of what neighboring counties are doing and comparing the data with the county’s current tax rate. In San Benito, every businessperson or entity engaged in cannabis cultivation in unincorporated areas of the county must pay an annual tax of $3 to $17 per square foot.
The remaining business categories would pay an annual tax based on gross receipts for the fiscal year:
- Distribution: 0.5% to 4%
- Manufacturing: 2.5% to 4%
- Laboratory testing: 0.5% to 4%
- Micro business: 2.5% to 5%
- Retail: 0.5% to 8%
This is much higher than other jurisdictions, such as Lake, Santa Cruz, San Luis Obispo and Monterey counties.
Two cannabis growers spoke at the Nov. 26 meeting in support of the county’s plan.
“This county hasn’t had a chance to get in the game yet because the original tax code was just untenable,” said Darren Story from Coastal Sun Farm. “This is a step in the right direction.”
The board unanimously approved moving forward with the plan of studying the exemptions and putting a tax reduction measure on the 2026 ballot.
“This industry has evolved to the point where it’s another agricultural crop,” Kosmicki said. “We are an agricultural community, there’s an economic development opportunity, and the tax is just out of line with what’s reasonable. That’s why we just don’t have any businesses here.”
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